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| Kohl Proposing Bill to Extend Farm Credit to Struggling Producers |
USAgNet
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U.S. Senator Herb Kohl is introducing legislation to ensure that farmers and ranchers will continue to have access to loan guarantees through the USDA's Farm Service Agency. The Milwaukee Democrat says farmers often times are unable to receive a commercial loan because of circumstances beyond their control, like weather-related disasters, sudden market downturns or economic downturns.
The FSA loan guarantee programs contains a limitation on the number of years a borrower is eligible to receive a loan guarantee. The Food, Conservation and Energy Act of 2008 waives implementation of this term limitation. Kohl's bill would extend the waiver for another two years in order to allow farmers to access loan guarantees that help cover operating expenses.
"In many of our rural communities, access to credit has become increasingly difficult, especially for farmers," Kohl said. "Even those who were eligible for commercial credit just last year are not eligible for commercial loans without government guarantees today. These loan guarantees are critical to keep farms in business as they weather a rough agriculture economy."
The FSA estimates that more than 4,100 farmers and ranchers will become ineligible for loan guarantees if the waiver is allowed to expire at the end of the year, and an additional 2,300 will become ineligible over the next two years.
A recent survey of agricultural banks in the Midwest note that lenders are more likely to limit credit to farmers this year because of the continued recession and lower commodity prices.
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